A brief commentary on the published financial statements of Gazprom under IFRS for 2016.

The media makes headline increases in net profit by 20%, but this is due to the positive difference between financial revenues and financial expenses.

Profit from sales fell by 40 percent.

As revenue did not fall (even a small increase), the drop in operating profit is caused solely by a rise in costs of about half a trillion rubles. Effective you are our.

All cost items, including wages, grew - the number of employees reached an absolute record in the history of the company, 456 thousand people. In 1999 the number was 298 thousand people.

Gas production per employee has fallen from 1.8 million cubic meters per employee per year to 0.9 million cubic meters now. TWO. This is for you "labor productivity".

The extraction in 1999 was 546 billion cubic meters, in the past - 420 billion.

Effective mineral extraction tax (mineral extraction tax) was a miserable 21.9 dollars per thousand cubic meters. (The average price of gas sales to Europe is $ 176, to the former USSR is $ 154, in Russia $ 57).

The effective export duty rate for gas exports to Europe fell to below 19% of European revenue. This is an anti-record. In 2000 there was about 30%.

"Gazprom" obviously does not pay extra huge taxes - that's where the reserve money for the Pension Fund, as we said many times.

Europe recorded a record volume of gas - 228 billion cubic meters, this was never. But the revenue from gas exports to Europe decreased by more than 3% - because they were sold at unprecedented low prices ($ 176 per thousand cubic meters, as already noted). Only at such low prices Gazprom's gas is now competitive. Conclusion: there will be no superprofits, especially they will not be at so rapidly growing costs.

Another conclusion: the only market where revenue grew (while revenues from exports fell) was the domestic Russian market. Here, the native government will always cover, ensuring the growth of monopoly prices.

If Gazprom divides and creates a competitive environment on its base, such a growth in costs will not occur, domestic prices will stop growing, additional reserves will appear for the capitalization of the Pension Fund. Here you have a solution to a whole bunch of problems.

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